Power distribution firms may soon swap coal through online auction

The government will launch a portal to enable the swap, aiming for optimum utilisation by private as well as public power companies, the official said.Sarita Singh | ET Bureau | Updated: December 21, 2016, 08:34 IST

New Delhi: State-run power plants will soon be able to swap coal supplies with projects of private companies through tariff-based online competitive bidding, a senior power ministry official said.

The government will launch a portal to enable the swap, aiming for optimum utilisation by private as well as public power companies, the official said.

It will enable states to procure cheaper electricity by swapping coal to efficient power projects or by saving logistics cost.

The portal, christened Coal Mitra, will be launched by power minister Piyush Goyal on Wednesday. It will initially allow transfer of domestic coal between state and central PSUs but will soon be extended to include private power plants.

“The portal will enhance transparency in coal swapping and help reduce operational and logistic costs, bringing tariffs down,” the official said.

For coal swap, state generation firms will have to consult power distribution companies and ensure cost of power does not rise above existing tariffs after the transfer. State generation companies will float shortterm power supply bids and companies that agree to offer power at the lowest rate through reverse e-auction will be selected for coal swap.

The role of power regulators is proposed to be minimal as the distribution companies go through annual tariff corrections to set off the reduction in power procurement cost. The portal is an extension to the government’s measures allowing coal swapping between power plants owned by central and state power utilities and rationalisation of coal linkages.

Efforts are in line with the Ujwal Discom Assurance Yojna (UDAY), which aims at revival of state power distribution utilities.

The scheme envisages liberal coal swaps from inefficient plants to efficient plants and from plants situated away from coal mines to pit head to minimise the cost of coal transportation, thus leading to reduction in cost of power.

On Tuesday, Goyal launched a mobile application to track the ambitious household electrification programme. The Centre has shifted focus to 100% household electrification in all states.

Earlier, a village was declared electrified if 10% of households and all public places had electricity access.

It has collated state data assessing the number of unelectrified households and cost estimate for creating the necessary infrastructure. Preliminary estimates say there are 5.98 crore unelectrified households.

The government is targeting to provide electricity access to all Indian citizens by December 2018, while it aims to make power available 24x7 to all by March 2019, against the earlier target of March 2022.

Goyal will also launch on Wednesday three reports on renewable energy integration with thermal power, green energy corridors and electricity demand pattern analysis.

ET View

Boost To Productivity The move makes perfect sense. We do need to shore up thermal efficiency in the policy challenged power sector, so as to rationalise coal usage. And improved fuel efficiency in power would rev up productivity in generation, and more. It would proactively reduce carbon emissions and other negative externalities, such as reduced need for evacuation and haulage of fuel. Given that coal remains our main source of commercial energy, we need to purposefully optimise its use in thermal plants nationally.